Oil lobbyist counts many options for winning crude exports

By Jennifer A. Dlouhy Houston Chronicle

Published 5:03 am, Thursday, October 15, 2015

Photo: Sarah A. Miller

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THE FACTS:

Without lifting the decades-long export ban on crude, the oil that would be transported via the pipeline couldn't be exported. But the gasoline, diesel and other products made from the oil at Gulf Coast refineries could be shipped abroad, a trend that is already on the rise. In 2011, for the first time since 1949, the U.S. exported more products refined from oil than it imported. In 2012, these products were the single largest U.S. export.A portion of the gasoline and diesel made from the oil transported down the Keystone XL pipeline will no doubt end up in the global marketplace. As new efficiency standards, coupled with increasing environmental awareness, start to reduce U.S. oil consumption, demand is rising abroad. But these exports still would confer some economic value to the U.S., including to the refiners that buy the oil and sell the product.

WASHINGTON — A top oil industry lobbyist on Wednesday insisted there are dozens of options for getting legislation authorizing widespread crude exports through the Senate and to the president’s desk.

“We could probably identify 20 or 30 different paths to success here,” American Petroleum Institute president Jack Gerard told reporters on a conference call. “It is significant, though, that you’re hearing more and more (lawmakers) say, ‘I think we could work something out here.'”

Gerard declined to outline specifically some of the potential deals that could propel a House-passed crude exports bill through the Senate, much less win President Barack Obama’s support despite a threatened veto.

“The oil and natural gas industry has really left it to the Congress to decide how they develop the energy policy, who they give tax credits to, who they subsidize and who they don’t,” Gerard said. “Our view is pretty narrow and focused because we believe it sells itself; when you lift the export ban on crude oil, it’s good for the American public, it’s good for the American economy and it’s good for American consumers.”

The House of Representatives passed a relatively clean oil exports bill on Friday without tethering the trade policy change to other issues, except for authorizing new federal spending on a maritime security program.

But getting that House-passed bill through the Senate — and luring enough Democratic support to beat back any potential filibusters — is likely to require pairing the issue with other legislative priorities.

Possibilities include folding oil exports into a must-pass spending measure or a highway bill that doles money to infrastructure projects around the country.

Oil exports also could be paired with a reauthorization of the 50-year-old Land and Water Conservation Fund that helps pay for new federal land acquisitions and recreational areas.

Several Democrats have floated the idea of authorizing crude exports in exchange for renewing now-expired renewable energy tax credits that help finance wind farms and solar arrays. But that combination could bleed off as many Republican votes as it gains in Democrats, because the renewable production tax credit is not popular with fiscal conservatives.

Gerard declined to say whether the oil industry would support a compromise involving renewable tax credits. But he made clear that as far as oil companies are concerned, one proposal for new industry taxes is off the table.

A new per-barrel production fee on oil “is one of the sillier proposals I’ve heard,” Gerard said. “Why would you go raise the costs to the American consumer, to the American producer to really make them noncompetitive in exchange for the ability to make them competitive by going into the global marketplace?”

Some oil industry lobbyists have said it’s better to wait on the issue than cut potentially expensive deals now, because a new president could change the policy without Congress, and many Republican candidates support crude exports.

API prefers a straight, exports-only approach.

“We can talk about a lot of different machinations, but the cleanest, most straightforward way — the cleanest, clearest path to success — is a straight up-or-down bill that says lift the export ban on the United States,” Gerard said. “That’s the clearest pathway to this. It’s just probably a little more difficult for some in leadership to get that clean bill up without further conversations.”

The 40-year-old export ban blocks most U.S. oil from being exported, though there are exceptions for shipments to Canada and some crude extracted in Alaska and California. The federal government also recently OK’d sending some U.S. oil to Mexico.

The issue is a top priority for energy companies including Anadarko Petroleum Corp., ConocoPhillips, and Pioneer Natural Resources, which argue oil exports would be good for business, helping to keep rigs working in U.S. fields and sustaining the jobs tied to them amid a global collapse in crude prices.

Some refiners are battling to preserve the status quo, with trade restrictions limiting exports of raw, unprocessed crude but not affecting gasoline, diesel and other refined petroleum products.

Studies by think tanks, academics, research firms and the federal government have suggested that exports could boost U.S. oil prices that often are lower than international crude benchmarks. The change could lead to a modest decrease in U.S. gasoline prices pegged to international crude costs, according to the analyses.